| INCOME TAXES
We are subject to U.S. federal, state and international income taxes. We are generally no longer subject to federal, state, or international income tax examinations by tax authorities for years before 2016 with a few exceptions. Due to the potential for resolution of state and foreign examinations, and the expiration of various statutes of limitations, it is reasonably possible that our gross unrecognized tax benefit balance may change within the next twelve months by a range of $0 to $5.6 million.
Effective Tax Rate
Our effective income tax rate is 14.5% for the three months ended September 30, 2019 compared to a 2.3% benefit for the three months ended September 30, 2018. Our effective income tax rate is 11.7% for the nine months ended September 30, 2019 compared to 15.6% for the nine months ended September 30, 2018. Our third quarter 2019 tax rate is higher due to discrete benefits being proportionally lower compared to pre-tax book income than those recorded in the third quarter of 2018. Our effective tax rate is lower for the nine months ending September 30, 2019 as compared to 2018 due to permanent tax differences resulting from the accrual for losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident. We computed third quarter and year-to-date income taxes for 2019 using the discrete method, applying the actual year-to-date effective tax rate to our pre-tax loss. We believe that this method yields a more reliable income tax calculation for the period due to the uncertainty associated with the estimates of our annual domestic pre-tax book loss due to the accruals recorded earlier during 2019 and the uncertainty as to the outcomes of the other remaining matters related to the litigation, claims, and government investigations related to the 2017 cybersecurity incident.
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